5 years ago

Klout, Cathay Pacific and the perils of social media-led influencer marketing

NB: This is a guest article by Shubhodeep Pal, senior innovation officer at airline and airport strategy firm SimpliFlying.

Cathay Pacific and social influence measurement service Klout have a partnership, heralding the high profile arrival of so-called influencer marketing.

But beware the pitfalls!

The airline and Klout, an online service that measures social influence on a scale of one to 100, announced the exclusive deal wherein users of Klout’s iPhone app could gain access to Cathay’s branded Business and First Class Lounge at San Francisco International Airport simply by showing the lounge receptionist a score of 40 or higher on their iPhone.

Note that all flyers who use the Klout app, regardless of whether they’re flying Cathay, can access the lounge provided they meet the minimum requirement.

Time to recognize the cult

Here’s the good news first: it’s cheering to know that airlines are finally waking up to the power of influencer marketing.

We have constantly encouraged airlines to reach out to their most influential (in terms of online influence) flyers so that they can leverage the power of what we call Cult Relationship Management.

A simple story told over and over again illustrates this point beautifully: when celebrity Paris Hilton once flew first class Emirates she was so impressed by her suite that she tweeted photographs of it to her millions of followers (who form the cult), who in turn have their own followers.

It was estimated that this apparent free publicity was worth millions of dollars given the rates at which Paris Hilton normally did commercials.

Social advocacy is an increasingly desirable pull-marketing tool that airlines are looking to leverage as they wake up to the viral power of social influence.

Cathay Pacific’s best hopes would be that something similar to the Paris Hilton incident happens with its lounge as well, so more people are encouraged to fly Cathay and experience its high-end service.

Vice president of marketing in the Americas for Cathay, Dennis Owen, says:

“By partnering with Klout, we have the opportunity to invite travelers who typically may not fly with us to experience our ground products and services, in hopes that they may one day choose to visit us again.”

Actually, they hope a bit more. They hope that these social influencers will advocate Cathay’s lounge and service to their online following and convince some of them to fly Cathay the next time they fly out of San Francisco.

In theory, Cathay’s thinking is sound. Having loyal influencers is always worthwhile.

Take Estonian Air’s much-feted social loyalty program, the first in the world for airlines – it leverages the power of influencer marketing. Social advocates get real-world rewards for online actions.

But don’t forget to focus on ROI

But here’s the bad news for Cathay. When Air New Zealand announced its Foursquare Mayors initiative, it rewarded the mayors of selected terminals with lounge access only if they were flying Air New Zealand.

With Cathay’s new initiative, the net has been cast much wider. Here’s why I feel it might be a bad move and a loss-making initiative:

  • The benchmark of 40 is too low. Nobody influential online would have a score that low. If Cathay really wanted some ROI out of it, it should have at least tried to target the top-end of the influencer spectrum.
  • Anyone without a ticket on Cathay and with a Klout score of 40 could get in. That could potentially be the entire city of San Francisco, home town of many a social media darling and, of course, Silicon Valley. There’s a hazard if there ever was one. The entire city might be an exaggeration, but I do know people who rarely tweet and are happy to post cat pictures on Facebook but still hit 40, even 50, on Klout. So essentially, even if you’re moderately active on social media, congrats! You have a free pass to Cathay Pacific’s lounge. You can fly economy over the next three months while the offer is active and enjoy some of the perks of flying Business.
  • The influencer marketing could backfire. What if those influencers actually gamed Klout to get their friends access to the lounge instead of propagating the brand as Cathay expects them to? The lack of compulsion to fly Cathay and the low benchmark could cost the airline heavily in the coming months.

All one can expect is that the real gainer from this partnership would be Klout, which, despite its best PR efforts, has been on the end of stinging criticism and plenty of tongue-in-cheek comments about its irrelevance over the last year.

Even though the latest Wired profile would have you believe otherwise, within the circle of consultants in aviation at least, Klout’s validity and relevance has become increasingly suspect especially due to its erratic algorithm changes.

But this is a necessary first-step that shows great, and valid, belief in what the power of social influence has to offer brands. Welcome to the world of influencer marketing, Cathay. We hope you do it better in your next initiative.

NB: This is a guest article by Shubhodeep Pal, senior innovation officer at airline and airport strategy firm SimpliFlying.

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  1. Stuart Barwood

    40 definitely seems too low for a start.

    This would seem to have implications for existing customer base. How would you feel if you were a regular (ish) customer of Cathay Pacific, flying economy few times a year but not enough to qualify for lounge access and you found that people who aren’t even flying with the airline are getting benefit you are not?

    In addition, business class passengers who have paid for the privilege of lounge access may be less than impressed with a flood of promo passengers flooding in.

    However, by making it lower and a bit controversial they’ve made it newsworthy and hence we’re all talking about Cathay’s new lounge in San Francisco on an article featuring a photo of the lounge.

    Ultimately, the objective of the promotion is to raise the profile of the lounge, which it appears they are doing.

  2. Norm Rose

    Klout is a very limited way to measure social influence. The industry needs to check out NodeXL http://nodexl.codeplex.com/ a free, open source Excel plug-in that allows you to create maps of your brand’s social networks. We are at the very start of a new era of social network analysis. We need to move beyond simple scores based on number of followers or number of tweets and understand who the real influencers are associated in your travel brand community.

  3. @AvWikinomics

    Many if not most “social influencers” are social media mavens and gamers – and as such – they know how to “game” the system.

    Getting a high score on Foursquare can be achieved by 1) increasing your network befriending total strangers and 2) making up fictitious places to visit each day / becoming mayor of your bedroom or garage,

    Influence networks are import and valuable – but as Shashank Nigam, CEO of SimpliFlying points out – poor execution can lead not only to poor ROI but the exact opposite outcomes desired.

  4. chris

    Eric: This lounge at SFO is brand new and simply outstanding… as nice or nicer (albeit smaller) than the wing and the pier in Hong Kong. (And I’ve been to both recently).

    Take a look at my photos/story here: http://blog.sfgate.com/cmcginnis/2012/02/08/two-new-designer-clubs-at-sfo-photos/

  5. Eric Olesen

    Sure, yhey’re getting mentions within the Evangelical Church of Social Media congregations, but I doubt it is going to result in a single customer conversion.

    If the SFO lounge is similar to the current CX lounge at LAX, I think you may also be over-estimating the impact of the ground product… It’s nice, but it’s not The Wing or The Pier.

    Call me a skeptic. Has anyone considered the negative offsets from introducing some freeloaders slurping up noodles and stuffing canapes & cans of Diet Coke into their backpacks?

  6. Ron Callari

    Sanhodeep, great post. But I differ on your point re: upping the KLOUT score above 40 to target only the most influential social media super stars. I think with a first-time-out-of-the-gate promo like this, Cathay wasn’t so much interested in ROI this go-around, but moreso in creating buzz. And that goal was achieved 100-fold – as there must be several hundred posts and blogs on this story to date. Plus above-40 would have created a barrier-to-entry – and as much as high KLOUT scores makes folks feel like they belong to an exclusive club of influencers and by inference lends a certain cache to the brand – this go-around, those with lesser scores can get to try out Cathay’s club lounge perhaps for the first time – only to be potentially converted into Net Promoters over time. And thus improving the longer-term ROI, vs a short term gain.

    I have a great convo going, debating the pros and cons of Klout as it pertains to this promo on my recent blog site –> http://bit.ly/LqynYx (ck out the COMMENT section) – Would love your input?

    Best, Ron from Flip.to (http://flip.to )

    • Shubhodeep Pal

      Ron, While I agree that Cathay has indeed driven a lot of buzz. But I’m wondering if it could not have been done in a less expensive manner? Given the tech-savvy city SFO is, a lot of freeloaders might get into the lounge. While the lounge, by all accounts is absolutely fabulous, I’m sceptical of the chances of converting a regular Economy Class passenger to a higher class based on the lounge alone.

      Be right over to your blog.

  7. chris

    Hey all: hate to be a buzz kill here… but TSA only allows travelers with boarding passes for international flights departing from the 12 gates on A side of SFO International terminal. So even if you have a 40+ score, if you don’t have an international boarding pass, you won’t be hittin up that nice Cathay noodle bar!

    • Shashank Nigam

      So it can be safely concluded that only international travelers on other airlines, who have the Klout mobile app installed, and have a score of more than 40 are the only ones who will be able to take advantage of this offer.

      This probably is indeed Cathay’s target market, and once they experience the ground-product, they may be tempted to share the experience with their friends on social media, and hopefully themselves buy a Cathay ticket in the future.

      While a direct link to revenue from future ticket sales from these people cannot be established, Cathay is certainly getting a lot of PR value out of this. At the very least, Cathay needs to be recognized for at least trying something new and being daring in a mostly-boring world of legacy airline marketing. And as is the case with most social media campaign, unless you try it, you won’t know if it works for you or not. Let’s see how this one goes for Cathay…

  8. DonaldS

    I would suggest that anyone who takes Klout seriously just rewind the firehose a few months to see how long it took a few “friends” to transform me into the Klout rated #1 global influencer in yoghurt.

    Just to be clear: I know nothing about yoghurt.

  9. jeremy head

    I hate Klout – honestly… this stuff will make idiots of all of us… It’s a short cut to nowhere…
    All kinds of rubbish being written about it. According to a recent puff piece on Techcrunch people who get offered Klout perks go on to create an average of 30 pieces of content about the experience… like seriously?! How massaged is that?

    And it’s SO easy to game your Klout score… As one commentator put it… Klout is a game… thus in my opinion not something to take seriously if you are a marketer.
    More thoughts on this subject here – along with lots of links to background about gaming your Klout score…

  10. Stuart

    @Martin Good point

    So Plan B and a quick pivot to borrow tech parlance

    Buy a ticket to Mexico City

    1. UA 429 H 15JUN SFOMEX HS1 2321 #0537 O E FR

    roughly £225

    So 15 hours at the bar and noodle counter = £15 an hour and a free one way flight to the delightful Ciudad de México…
    Or the truly crafty could buy a fully refundable ticket and get your money back afterwards…

  11. Dee

    Would they not be better off doing a promo of letting economy class passengers of Cathay Pacific use that funky lounge during a certain time period? People who actually pay them cash and may be likely to pay for an upgraded cabin next time. I know that sounds dreadfully old fashioned and doesn’t start with a K though.

  12. Martin Symes

    Sadly Cathay’s lounge is after security in the A gates of the International Terminal so don’t think Stuart’s plan will work for domestic passengers 🙁

    • Jonathan Alford

      Good article – Klout and broader social media intelligence platforms with “influencer” identification are interesting concepts, and to their credit, they’ve done a great job marketing themselves.

      It’s just that to identify real influencers, companies may need to do some manual homework, too, and trace through the social networks to see what and if they’re really “influencing”.

      Paris Hilton is actually a good example; on the other hand, last year I did some tracking on Radian 6’s influencer identification, and the #1 ranked influencer – for its own brand “Radian 6” – was an Amazon.com product page for the TV show, “Breaking Bad,” with no mention of Radian 6 whatsoever.

      It may improve, but as Shubhodeep might agree – buyer beware – check the actual results and indirect costs of managing these tools as well.

  13. Nathan Midgley

    “Gain access to Cathay’s branded Business and First Class Lounge by showing the lounge receptionist a score of 40 or higher on your iPhone.”

    The real viral potential lies in posting photos of the look that passes across lounge receptionists’ faces when that happens.

  14. Stuart

    Well if they’re generous enough to offer these kind of deals that the responsible traveller, should of course, take advantage…

    Now Cathay fly twice a day out of San Fran to Honkers…

    1234567 SFO HKG 0110# 0615 CX 873 744*C
    1234567 SFO HKG 1335# 1845 CX 879 744*C

    Which means the lounge is going to open early for that lunchtime flight. Looks nice by the way


    Now if you get the latest flight out of San Fran to LA…

    SFO LAX 2240#0005 UA 197 F9 A9 Z9 P9 Y9 B9 M9 E9 U9 H9#738C*

    …which leaves at 2240 on United. And costs £56.20 one way.

    So say you get to the CX lounge at 8am you have 14 hours eating and drinking.
    So unlimited bevvy at £4 an hour. You can’t knock that.
    Who says Klout isn’t great…

  15. Alastair McKenzie

    “I don’t care to belong to a club that accepts people like me as members.” Groucho Marx 😉

  16. Shubhodeep Pal

    Alex – The estimate is notional. It’s not in terms of revenue that Emirates got but in terms of what it would have cost Emirates had they hired Paris Hilton to do a commercial for them. The difference was that her delight and endorsement were genuine. The point is that this genuine goodwill spread far and wide (in the millions) and even a 1% conversion rate would have been rewarding for Emirates.

    And the problem that I point out here is that Cathay is not even targeting its own customers. It’s simply targeting users of Klout.

    And as far as I’m concerned and as I do state, I would not even consider a 40+ K score user influential at all. So there goes Influencer Marketing for a toss.

  17. @calomas

    I agree with the article that 40+K seems to low. The positioning of this in SFO is also interesting, and the implications are absolutely huge with it being the hub for Silicon Valley. Let’s wait and see what the sentiment is that they get from the buzz and ultimately whether it translates into more people travelling with Cathay, that they can directly contribute to this initiative, or whether people just take advantage of it for a while and wait for other airlines to follow suit. I cant imagine @VirginAtlantic ever opening their lounges up for anything less than 50+k or even 60+K (and that would still be worth it!)

  18. David - GeoPosted

    I agree with Alex here.
    A Klout score of over 40 sounds way too untargeted to be useful and is ripe for abuse. Even just linking it with some of those Klout topics could already help in narrowing it down to a more specific niche of influencers.

  19. Alex Kremer

    Given the extremely rare crossover between a Paris Hilton fan and the typical Emirates First customer, was her tweetage really worth millions? I think not.

    Same concept applies here. My guess is the typical Cathay customer has no idea what Klout is and will be even less impressed with some kid influential in cat memes scoffing up all the canapés.


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